NEWSLETTER 62 July 16, 2014

THE FOCUSED STOCK TRADER

www.thefocusedstocktrader.com


BioFuels Energy Corp. (NASDAQ: BIOF) www.bfenergy.com
JBGL http://www.jbgl-capital-lp.com/

BioFuels Energy Corp. NASDAQ: BIOF
07/15/2014 Closing Price: $6.61 07/15/2014 Market Cap (mn): $35.96
2013 Post-Merger Sales (mn): $207 2013 Post-Merger Net Income (mn): $32

COMPANY DESCRIPTION
BioFuel Energy Corp. was founded in 2006 to build and operate ethanol production facilities in the
Midwestern United States. On November 22, 2013, the companys ethanol plants and all related assets
were transferred to lenders to eliminate all debt. Following the disposition of the ethanol production
facilities, BioFuel Energy are a holding company with no substantial operations headquartered in
Denver, Colorado. At March 31, 2014, the company had $10.1 million in cash and cash equivalents and
federal net operating loss carryforwards of $179.0 million.

On March 28, 2014, BioFuel received a proposal from James R. Brickman and Greenlight Capital, Inc. to
acquire all of the equity interests of JBGL Builder Finance LLC and certain subsidiaries of JBGL Capital, LP.
(collectively known as JBGL) for $275 million, payable in cash and common stock.

On June 10, 2014, the agreement between Mr. Brickman and Greenlight Capital was definitive and was
unanimously approved by BioFuels Independent Directors.

As of July 11, 2014, Greenlight Capital, Inc owned 35.4%of BioFuels outstanding common stock and
Class B Common Stock together. David Einhorn, one of the best-known and most fundamentally driven
investors on Wall Street, runs Greenlight Capital. Einhorn founded Greenlight Capital in 1996. Since
inception, Greenlight Capitals investment performance has been outstanding returning 25%per year
compare to S&P 500 returns of 5.56%per year.

BioFuel is in the process of conducting a rights offering with Greenlight Capital, Inc and ThirdPoint LLC
participating and providing a Backstop Commitment, meaning these institutions will purchase any of the
rights issue not taken by the public. The proceeds from the rights offering will be used to acquire JBGL.
Greenlight Capital and ThirdPoint expect the total rights offering will be $70 million. The remaining $205
million for the acquisition will be financed with cash on hand and a $150 million of debt financing
provided by Greenlight Capital. After the rights offering, Greenlight Capital will be the largest
shareholder and creditor. Greenlight expects to control 49.9%of the voting power of BioFuel. BioFuel
will also owe $150 million to Greenlight.

ThirdPoint is the second Wall Street Hedge Fund in the deal. ThirdPoint LLC is run by Daniel Loeb
another titan of Wall Street. Like Greenlight Capital and David Einhorn, ThirdPoint is known for its
fundamental approach to investing. Mr. Loeb founded ThirdPoint in 1995 and, similar to Greenlight
Capital, has generated annualized returns of roughly 25%per annum since inception.

Other investors participating in the rights offering include JMB Capital Partners Master Fund, L.P.,
Lonestar Partners, LP, North Run Master Fund, LP and Scoggin LLC.

JBGL is a real estate operator involved in the purchase and development of land for residential use,
construction lending and home building operations. JBGL Capital was formed in 2008 and JBGL Builder
Finance was formed in 2010. Greenlight Capital provided a majority of the initial capital for both entities,
with Mr. Brickman providing the remaining capital. JBGL Capital and JBGL Builder Finance are engaged in
all aspects of the homebuilding process, including land acquisition and development, entitlements,
design, construction, marketing and sales of various residential projects in master planned communities,
primarily in the metropolitan areas of Dallas and Fort Worth, Texas and Atlanta, Georgia. JBGL currently
owns or controls approximately 4,600 home sites in prime locations in the DFW and Atlanta markets.
JBGL also owns 50%controlling interests in several builders and provides construction financing for
approximately 900 homes annually.



As illustrated in the Pro-Forma Financial Statement of JGBL above, BioFuel is acquiring 2013 revenues of
$207 million and net income of $44 million. As of July 15, 2014 close, BioFuel had a Market Cap of
$35.96 million. It will use raise another $70 million during the rights offering bringing the total Market
Cap to $105.96. This Market Cap $105.96 million will acquire 2013 net income of $44.6 million for a PE
of 2.37 times. JBGL grew earnings by 113%in 2013 and 48%in Q1 2014. The entity will also have net
operating loss carryforwards of $179 million, which at a tax rate of 35%will create an additional $62.65
million in value from taxes not paid. The net operating loss carryforward value alone is 59%of the total
market capitalization of BioFuel after the rights issue.

Conclusion
JGBL Pro-FormaIncome Statement 2010 2011 2012 2013 2013 2014
REVENUES:
Sale of residential units 864,822 9,085,785 50,105,030 168,591,201 27,129,401 49,636,344
Cost of residential units (491,628) (7,921,806) (39,642,357) (122,616,113) (21,043,004) (37,392,367)
Gross profit on sale of residential units 373,194 1,163,979 10,462,673 45,975,088 6,086,397 12,243,977
Sale of land and lots 8,905,967 6,184,206 22,927,080 33,734,513 5,630,623 13,372,568
Cost of land and lots (5,540,845) (3,982,602) (15,256,065) (21,512,814) (2,595,292) (9,768,066)
Gross profit on sale of land and lots 3,365,122 2,201,604 7,671,015 12,221,699 3,035,331 3,604,502
Interest and fees 137,698 2,558,159 7,124,339 3,542,174 894,853 374,460
Other income 225,524 1,636,099 3,771,839 1,400,418 432,094 52,422
Total Revenues 10,134,011 19,464,249 83,928,288 207,268,306 34,086,971 63,435,794
Total Cost of Goods Sold (6,032,473) (11,904,408) (54,898,422) (144,128,927) (23,638,296) (47,160,433)
Gross Profit 4,101,538 7,559,841 29,029,866 63,139,379 10,448,675 16,275,361
EXPENSES:
Salaries and management fees-related party 927,736 1,886,509 4,370,845 11,266,351 2,148,132 3,533,968
Selling, general and administrative 1,147,042 1,183,762 3,311,734 6,623,437 1,287,854 2,281,569
Other expenses 3,332 35,737 404,673 606,210 131,105 306,899
Total expenses 2,078,110 3,106,008 8,087,252 18,495,998 3,567,091 6,122,436
Net income before taxes 2,026,428 4,453,833 20,942,614 44,643,381 6,881,584 10,152,925
State tax expense 41,888 34,089 230,411 327,481 150,500 337,790
Net income 1,984,540 4,419,744 20,712,203 44,315,900 6,731,084 9,815,135
Less: net income attributable to non-controlling interest - 56,382 3,517,911 12,308,734 699,625 2,466,634
Net income attributable to controllinginterest 1,984,540 4,363,362 17,194,292 32,007,166 6,031,459 7,348,501
For the Three Months Ended
March 31, For the Year Ended December 31,
BioFuel is an attractive special situation. BioFuels acquisition of JGBL allows investors to participate with
some of leading Hedge Funds on Wall Street. BioFuels is acquiring a very profitable company for 2.37
times earnings with earnings growth of over 100%in 2013 and an additional 59%of current market
capitalization in the form of net operating loss carryforwards.